Cell Therapeutics – Pressure Building, ASCO Coming Soon, The Bear View
May 12, 2009 at 9:35 am EST | Tags: CEOs & Management, Conferences, Deals & Alliances, Filings & Approvals, Finance, Gossip & Rumors
It’s always fun
to keep tabs on the companies that are riding waves. Some of them are
real and some are fake. In the end, of course, you never know what’s
what until either the rumor becomes reality and/or the company shows
their cards (i.e. the data). A few examples have been DNDN (Dendreon)
and the ongoing OSCI (Oscient), ACOR (Acorda) and AGN (Allergan)
buyout rumors.
One of the biggest we’ve seen in a while is Cell Therapeutics (CTIC). The company has been touting Pixantrone data since it released the results of the EXTEND study back in March. Since then, CTIC has continued to hang on by a thread as it further dilutes itself with more financings while (possibly) awaiting a partnership with a third party. All this while the company continues its rolling NDA filing for Pixantrone and holds its breath for OPAXIO.
Today, however, Adam Feuerstein at The Street ripped CTIC, well, a new one, and advised traders, investors not to fall into the trap. Adam was also less than enthusiastic about the Pixantrone data, which no one has seen in detail yet, and even less enthusiastic about CEO Jim Bianco’s track record.
Here’s Adam’s view on Pix’s potential:
“It’s a nice story — wildly exaggerated. Pixantrone is, at best, a mildly improved version of a commonly used chemotherapy drug that has already gone generic. If Cell Therapeutics is lucky, pixantrone will be used as a last-resort treatment for a few thousand desperately sick lymphoma patients and generate $50 million a year in sales. If I were generous, I’d say peak sales could reach $100 million.”
Regarding the recent financing:
“The reality of the situation is even worse because Bianco is going to have a very difficult time persuading his debt holders to accept 25-30 cents on the dollar. He needs 70% agreement to the terms for the tender to work…If the debt holders balk, Bianco’s options are lousy. One way or another, he has to raise more money with another massively dilutive financing just to pay off the debt.”
On partnering Pixantrone:
“Can Cell Therapeutics find a partner willing to sell pixantrone in exchange for a significant royalty payment? Maybe. Bianco is telling investors that Novartis, which has an option on pixantrone, is very interested. But if that’s true, why is Novartis dragging its feet? Could it be that potential partners are worried about the approvability of pixantrone?”
On Pix safety:
“The safety of the drug will be key because Cell Therapeutics’ big selling point is that pixantrone causes less cardiac toxicity than other similar chemo drugs like doxorubicin. But if that’s true, then why did more patients in the pixantrone arm of the pivotal study report severe cardiac side events, including one patient with chronic heart failure attributable to the drug, compared to the control arm?”
On Bianco:
“Bianco sells never turns out as good as the promises he makes. Cell Therapeutics keeps burning cash. The company never comes close to earning a profit, and shareholders lose money. It happened with Trisenox, Zevalin and Opaxio; the same will happen again with pixantrone. Bianco is the only person who wins in the end because he finds a way to pay himself an exorbitant salary.”
As for the full Pixantrone data, CTIC will have a poster at ASCO and we’re sure pressure will be building up around that time.
We have a few points to mention:
Pix’s selling point will not be safety, but efficacy. Safety will be looked at and considered, but only as an adjunct to response and PFS. Remember, this is the third-line setting.
We agree with financials, CTIC capital structure is more than screwed up. There’s a lot of potential scenarios that can occur over the next few months to improve this, but we’ll leave that discussion up to the commenters.
Finally, CTIC has a less than stellar history and we can’t always trust management. So, we agree with you. In fact, we hardly ever trust management. It’s all about the data and we’ll have to wait a few more weeks for ASCO.
Is CTIC another DNDN? Is the media building up a story that doesn’t exist? Hype or truth? Thoughts??
We’ll continue to follow the 2009 triumph/collapse of CTIC…
No positions in CTIC, competitors or partners
Image from newsday
![[Loading...]](http://www.iguanabio.com/wp-content/themes/IguanaBio/images/ajax-loader.gif){kind=small}
agree, lots of hype here
Anyone can see that when Feuerstein writes about CTI, his personal disdain for the CEO fogs any objectivity about what he is writing on. He is more interested in attacking the CEO than giving investors any sound advice. And does any investor think their stake in the company is reduced by the reduction in debt. Seems to me that increases the value.
I take issue with his statement that NVS is dragging its feet on the PIX/OPA options. It would be foolish for them to act any sooner than they have to.
-Mark
By the way, it’s Adam, not Seth Feuerstein…
Wow. You’re right. Maybe skipping Dunkin’ this morning wasn’t such a good idea. Thanks for the catch and heads up Mark.
IB
Everyone knows AF is the muse of hedge funds, Perhaps the fund that got priced out of Cell’s deal put AF up to the distasteful task of being less than an objective reviewer. Facts are the Company has hired new management, worked diligently on cleaning up its cap structure and yes managed to develop an attractive asset that is now being recognized by the investment community and pharma. alike. Perhaps AF believes Cephalon’s Treanda, which won approval on a single arm study in 100 pts with >=1 st relapsed indolent NHL based solely on response rate (CR rate 17%) will only be a $50mm product. Given pix was the first drug tested in a randomized control trial in aNHL demonstrating not only significant increase in CR rate but PFS with an acceptable saftey profile . Does anyone believe that 5 Vs 2 patients with any reported cardiac event irrepsective of relationship to drug in a salvage population is a “safety” concern. I find it incredulous that AF is still taking cheap shots. On second thought , I forgot he flunked out of working on the buyside falling back to the safe harbor of the media where he niether takes risk, creates jobs or value let alone works hard. He should go back to finding a better use for his political science degree. If he had real balls he might take a run at Rush Limbaugh
Have you taken a look at the Pixantrone trial(s) ? Or the shares running out of this company ? What are your thoughts on these issues. They seem to be ignored.
Trial SPA designed for 320, 74 % discontinuance rate, 140 enrolled, 97 evaluable. 130 trial sites in 17 Countries only 97 evaluable (not even 1 per site ?) FYI they had 2 or 3 other pixantrone phase III tests all were terminated early (no results released). The initiated a trial in Indolent – terminated it – initiated another trial in indolent – terminated it.
TRIAL DESIGN:
Special Protocol Assessment (SPA) with the U.S. Food and Drug Administration (FDA)
Estimated Enrollment: 320 Study Start Date: July 2004 Estimated Study Completion Date: April 2010 Estimated Primary Completion Date: August 2008 (Final data collection date for primary outcome measure)
TRIAL SITES
“The trial was conducted at 130 sites in 17 countries.”
ACTUAL ENROLLMENT
“A total of 140 patients were enrolled in the study, 97 patients are currently evaluable according to Histological Intent to Treat, or HITT, criteria and will be included in the final analysis of the study.”
“”Seventy-four percent of patients discontinued therapy for disease progression or death, the majority of which were in the standard chemotherapy control arm.”"
RESULTS
“The pixantrone patients had a higher incidence of leucopenia and neutropenia and numerically more severe cardiac events (4 vs 2) than in the control arm.”
RECENT SHARE HISTORY — Issued and Outstanding
October 16, 2008….37,445,816 November 6, 2008….58,464,608 December 15, 2008…125,084,337 February 6, 2009….321,839,943 shares outstanding April 17, 2009, the Company had 433,181,335
TERMINATED TRIALS
“As of January 1, 2004, pixantrone, also known as BBR 2778, was in Phase III clinical trials in indolent non-Hodgkin’s lymphoma, or NHL, in Phase II clinical trials in aggressive NHL, and was expected to enter clinical trials in multiple sclerosis, or MS, during the first half of 2004.
The trial for indolent NHL was modified and reduced to a registration supporting study and has been subsequently discontinued based on our strategy to conduct a pivotal phase III trial in aggressive NHL.”
——————– THEN — “We also launched a phase III trial of pixantrone in indolent NHL, the PIX303 trial, in September 2007″
——————- THEN — “We closed the PIX303 trial in early 2008…”
CTIC 10 Q may 12, 2008
did you guys see the new post?!!!
http://www.iguanabio.com/cell-therapeutics-shareholders-to-adam-feuerstein-youre-a-d/
iguana is going to do to a review on Pix!!!!
Also, who the f is Daphne Zohar? Strange people at iguana…